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Companies ( Accounts) Amendment Rules 2021 and Changes in Schedule-III (Preparation of Financial Statements) of the Companies Act, 2013

News from the desk of Ministry of Corporate Affairs (MCA)

1- Companies (Accounts) Amendment Rules, 2021

MCA vide its notification dated 24th March, 2021 has amended the existing Companies (Accounts) Rules, 2014 and has notified Companies (Accounts) Amendment Rules, 2021. The amended rules provides as under:

Mandatory use of accounting software with feature of audit trail : With effect from the financial year commencing on or after the 01st day of April, 2021, every Company is now under an obligation to use only such accounting software which has below features:

a feature of recording audit trail of each and every transaction;

creating an edit log of each change made in books of account along with the date when such changes were made; and

ensuring that the audit trail cannot be disabled.

Other matters to be part of the Board’s Report: Every Company shall include below additional matters as a part of the Board’s Report:

the details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 during the year along with their status as at the end of the financial year.

the details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons.

The above said rules would come into force with effect from the 1st day of April, 2021.

The complete text of the notification may be viewed at below link:

http://www.mca.gov.in/Ministry/pdf/AccountsAmendmentRules_24032021.pdf

2. Changes in Schedule III (Preparation of Financial Statements) of the Companies Act, 2013

MCA vide its notification dated 24th March, 2021 has amended the Schedule III of the Companies Act, 2013. The amended Schedule III requires following key disclosures to be included in the....

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Companies ( Audit and Auditors ) Amendment Rules, 2021

In exercise of the powers conferred by sections 139, 143, 147 and 148 read with sub-sections (1) and (2) of section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further to amend the Companies (Audit and Auditors) Rules, 2014, namely: —

1. Short title and commencement

(1) These rules may be called the Companies (Audit and Auditors) Amendment Rules, 2021. (2) They shall come into force with effect from the 1st day of April 2021.

2. In the Companies (Audit and Auditors) Rules, 2014, in rule 11,-

(1) clause (d) relating to disclosure related to specified bank notes shall be omitted.

(2) after clause (d), the following clauses shall be inserted, namely:-

(e) (i) Whether the management has represented that, to the best of it’s knowledge and belief, other than as disclosed in the notes to the accounts, no funds have been advanced or loaded or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities…

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Certain Companies not to be considered as listed Company:- MCA

MCA has vide its Notification dated 19th day of February, 2021 amended the Companies (Specification of definitions details) Rules, 2014.

The amendment has inserted another rule after rule 2. The newly inserted rule 2-A excludes following companies from the ambit of listed companies as defined under clause 52 of section 2 of the Companies Act, 2013 (“Act”), namely:-

(a) Public companies which have not listed their equity shares on a recognized stock exchange but have listed their –

(i) non-convertible debt securities issued on private placement basis in terms of SEBI (Issue and Listing of Debt Securities) Regulations, 2008; or

(ii) non-convertible redeemable preference shares issued on private placement basis in terms of...

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